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A Call to Arms? Yahoo's Work From Home Ban

Note from Raj Echambadi: Yahoo’s CEO Marissa Mayer has set off a firestorm by instituting a telecommuting ban (click here for the story). To understand the nuances of her decision, we requested our resident expert, Ravi S. Gajendran, to comment on this story. Here are Ravi’s thoughts on this subject.

Showing up matters! At least according to Marissa Mayer, former Googler and Yahoo CEO, who recently, perhaps unwittingly, launched a broadside against the millions of Americans that telecommute by banning Yahoo employees from working from home. A leaked memo to employees argued that showing up for work at a Yahoo office was the key to enhanced collaboration and teamwork.

For many telecommuters, her diktat carried with it portents of doom to the flexibility afforded by working from home. If this could happen in the heart of Silicon Valley, it would only be a matter of time before others began re-thinking their work from home policies. A media firestorm ensued, and continues to burn bright.

Does Ms. Mayer have a point? It depends.

There’s no doubt that telecommuting has primarily modest but beneficial effects on a range of employee outcomes: our meta-analysis in Journal of Applied Psychology finds that telecommuting is associated with improved job satisfaction and performance, and reduced stress and work-family conflict. Importantly, there are no significant negative relational outcomes with one exception discussed below. Still, these modest benefits may be outweighed by their potential costs under some circumstances. I highlight three possibilities.

First, it’s not clear if Yahoo’s ban applies primarily to employees that work from home 100% of the time or whether it also extends to those that do so part-time - perhaps once or twice a week. If it’s only the former, then Ms. Mayer is onto something here. Our meta-analysis shows that employees involved in high intensity telecommuting (more that 2.5 days a week) tend to report that they are less satisfied with their relationships with their coworkers. This spells trouble for full time telecommuters working in teams or in high interdependence jobs, which require collaboration and coordination. However, there is little evidence of any negative relational effects of low intensity telecommuting (less than 2.5 days a week).

Next, and more significant, for companies facing crises such as the one Yahoo faces, the benefits of urgency and solidarity symbolized by people showing up at work possibly outweigh the costs of potential turnover among the (likely) minority of employees that telecommute. It’s a call for “all hands on deck”. In crises, bits and bytes transmitted over wires are unlikely to create the sense of urgency and strong organizational identity required to pull together. Showing up at work is a test of employee commitment for an organization like Yahoo on the cusp of a do-or-die struggle. Perhaps, telecommuting is not for companies in crises – just as an Army cancels all employee leaves when faced with the possibility of war, telecommuting may be an unaffordable luxury for organizations confronting mortal challenges.

Finally, and more cynically, this may be a strategic way of jettisoning older, more senior employees who are most likely the beneficiaries of the work from program. Why lay-off when you can get people to willingly leave? This creates a leaner organization that unites around a common vision in a shared space. Today’s revolutions may have their beginnings over Twitter and Facebook, but it was revolutionaries assembled in flesh and blood at Tahrir Square that gave rise to a new beginning. Perhaps, this is Yahoo’s Arab Spring, and Ms. Mayer just issued a call to arms to assemble in offices and meeting rooms.

_____________________Ravi S. GajendranAssistant Professor of Business AdministrationUniversity of Illinois at Urbana-Champaign